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CME logs record Q2 numbers

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MOSCOW -- Central European Media Enterprises chalked up record second-quarter results for five of its six regional television stations, achieving an overall increase in net revenue of 38% to $216 million compared with the same period in 2006, it announced Monday.

The strong results in all territories -- except Ukraine, where Studio 1+1 has performed less well than the company had hoped -- reflects continued strength in the firm's stable of television stations.

The results come despite a gloomy long-term forecast for the television industry as a whole from CME CEO Michael Garin, voiced in June at Budapest's annual content market, DISCOP.

In a keynote speech that opened the confab, Garin told an international audience of executives that, in the face of global challenges from the Internet and other new media, the future of television was bleak.

Television networks as we know them in Western Europe and America will be gone within a decade, Garin said, adding: "In Central and Eastern Europe it will also happen but will take much longer because these countries are still only 15 years away from totalitarian pasts and are still developing. News and public affairs are much more important here than in the West."

Garin's faith in Central and Eastern Europe -- where CME runs 16 networks in six territories -- is evidently being rewarded by financial results. The company's second-quarter operating income was up $22.5 million to $66.6 million and net income from continuing operations increased $27.3 million to $34.6 million.

Fully diluted earnings per share in respect of continuing operations increased to $0.83 from $0.18 for the year-ago quarter.

"Five of our six markets continue to deliver record performances in the second quarter as shown by the 38% EBITDA increase over the same period last year," Garin said in a statement Monday. "While we were disappointed with the EBITDA performance of Studio 1+1, we are convinced that, in the next few years, Ukraine will become the largest market in which we operate."

Garin added that, while the political situation in Ukraine remains turbulent -- parliamentary elections are scheduled for late September -- CME remains "committed to Ukraine and will continue to aggressively but prudently pursue opportunities to further strengthen our presence there."